Discussion Papers 2018
CIRJE-F-1079 | "Interlinked Transactions under Tenancy System: A Case from Meiji Japan" |
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Author Name | Kojima, Yohei |
Date | March 2018 |
Full Paper | |
Remarks |
Abstract |
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This study investigates the interlinked transactions conducted by a landlord who had a money lending business in a local community in Meiji Japan. Contrary to the theoretical assumption, interlinked transactions did not have the effect of preventing debt default, mainly due to the existence of fixed-rent tenancy contracts with state-contingent rent reduction. Because landlords needed to enhance their own bargaining power in anticipation of rent reduction requests, even high-risk tenants could receive loans from their landlords and were allowed to repay in arrears, whereas it made it difficult for tenants to discount the rent amount in lean years. |